Cantillon: Fastnet chief explains switch to pharma

On April 18th, shareholders in Fastnet Oil & Gas – now known as Fastnet Equity – will be asked to give their approval to a reverse takeover by Amryt Pharma.

Fastnet is listed on AIM in London and the ESM junior market in Dublin with offices in both cities.

Amryt was set up last August as a platform to acquire, develop and monetise a pipeline of drug candidates focused on treating orphan diseases. It is proposing a reverse takeover of Fastnet subject to an all-share deal that would also involve raising £10 million for future acquisitions.

To help seal the deal, Amryt’s management team will give a presentation of their plans to Fastnet shareholders in the Double Tree by Hilton Dublin on Wednesday evening.

In a letter to shareholders, Fastnet's chairman Cathal Friel (pictured) reminded them that the company had "made a fairly good stab at starting a small oil and gas exploration company" in the past three years by building up a portfolio of assets in Ireland and Morocco while also securing a farm-out partner.

“However, we could not escape the clutches of the oil price collapse and rather than spend our remaining shareholder funds of circa €14 million on further oil exploration we sought and obtained 99 per cent shareholder approval to turn Fastnet into a pharma company last August,” he said.

Why pharma? “Our feeling was that investing in a pharma company was one of the few market opportunities where a prospective investor might get the potential to generate a multiple uplift in share appreciation much like a successful oil exploration campaign can generate.”

According to Friel, the Amryt team “believe they can transform Fastnet and potentially build it into one of Europe’s fastest growing orphan drug companies”. It has already acquired German pharma company, Birken and Sompharma in Switzerland.

“Many of this peer group of companies with approved drugs already have market caps approaching a billion dollars, thus I feel confident that Fastnet is on the right track to success,” Friel gushed.

Getting a drug approved is one thing, commercialising a drug is something altogether different, as many pharma companies have found to their cost.

But with former Shire founder Harry Stratford as chairman, and Mr Sudocrem, Ray Stafford, as a non-executive director, Friel's prognosis might prove accurate.